Yangon gets new business district; stock exchange to open on December 9

Reading Time: 3minutesArtist’s impression of a proposed design for Yangon’s new business district. Picture: Spiral Architects

Now that the elections in Myanmar have passed, the country hurries to resume a number of delayed projects to win back investor confidence which has been dented ahead of the crucial polls.

Two core projects are the creation of a new central business district in Yangon and the long-awaited opening of the country’s new stock exchange.

The new business district in the north of Yangon will be built at a cost of $345 million, with construction to begin next year, pending approval by the Myanmar Investment Commission. The tender for the project has been won by local firm First Myanmar Construction, a company which is part of the conglomerate of Sino-Burmese business tycoon Serge Pun, one of Myanmar’s richest persons. The development will comprise a number of high-rise buildings, including office towers, a business hotel, a shopping center, a trade center and a five-storey convention center and be located on a 14.5-hectare site in the Mayangone and Yankin townships near to Yangon’s international airport. Due to the proximity to the airport, the new business district is expected to ease pressure on the Yangon’s busy downtown area and rush hour traffic formerly unknown to the city that is increasingly clogging the streets. Completion of the business district is planned in five years. From then on, First Myanmar Construction as per a contract with the Yangon City Development Committee will operate the district for 50 years, with the option to extend the contract twice, by 10 years each time.

Meanwhile, word is that the Yangon Stock Exchange, or YSX, is set to launch on December 9 after three years of preparations and $24 million of investments, according to a statement by Myanmar’s Deputy Finance Minister Maung Maung Thein who is also Chairman of the Securities and Exchange Supervisory Committee. The exchange, ironically being developed by state-owned, but US-blacklisted Myanmar Economic Bank together with two Japanese cooperation partners, seeks to bring more stability and clarity into the opaque investment landscape in Myanmar and attract domestic and foreign capital. The foreign partners, Tokyo Stock Exchange and Daiwa Securities Group, are holding a 49 per cent stake in YSX.

Only a handful of companies are candidates to become YSX-listed at the time of launch, among them First Private Bank, Asia Green Development Bank, Myanmar Citizens Bank, Cooperative Bank, Forest Joint Venture Company, Thilawa Holdings Plc, First Myanmar Investment and Myanmar Agribusiness Public Corporation. Overall, 57 companies applied for a listing, according to the Securities and Exchange Commission of Myanmar (SECM). Some companies have been reluctant to join the exchange at this point of time, though, waiting for further refining of listing rules and regulations.

The SECM’s selection for shortlisting the first companies was based on criteria such as a minimum of 500 million kyat ($385,500) in paid-up capital and a minimum of 100 existing shareholders. There are also special regulations for joint ventures between domestic and foreign firms which will be required to operate separate bank accounts for US dollars and the local currency and must maintain a minimum balance of 15 billion kyat ($11.5 million).

Both projects, the new business district and the new bourse, are expected to boost investor confidence in Myanmar again after foreign direct investment fell during the first seven months of the country’s financial year (April to March) to $3.7 billion from $3.9 billion over the same period last year, said the Myanmar Directorate of Investment and Company Administration in a statement, indicating that investors had adopted a wait-and-see attitude for several months in advance of the November 8 elections. However, after the landslide victory of Aung San Suu Kyi’s democracy movement, economic sanctions may well be lifted and the economy including foreign investment inflows could pick up significantly.

Reading Time: 3minutesArtist’s impression of a proposed design for Yangon’s new business district. Picture: Spiral Architects

Now that the elections in Myanmar have passed, the country hurries to resume a number of delayed projects to win back investor confidence which has been dented ahead of the crucial polls.

Two core projects are the creation of a new central business district in Yangon and the long-awaited opening of the country’s new stock exchange.

The new business district in the north of Yangon will be built at a cost of $345 million, with construction to begin next year, pending approval by the Myanmar Investment Commission. The tender for the project has been won by local firm First Myanmar Construction, a company which is part of the conglomerate of Sino-Burmese business tycoon Serge Pun, one of Myanmar’s richest persons. The development will comprise a number of high-rise buildings, including office towers, a business hotel, a shopping center, a trade center and a five-storey convention center and be located on a 14.5-hectare site in the Mayangone and Yankin townships near to Yangon’s international airport. Due to the proximity to the airport, the new business district is expected to ease pressure on the Yangon’s busy downtown area and rush hour traffic formerly unknown to the city that is increasingly clogging the streets. Completion of the business district is planned in five years. From then on, First Myanmar Construction as per a contract with the Yangon City Development Committee will operate the district for 50 years, with the option to extend the contract twice, by 10 years each time.

Meanwhile, word is that the Yangon Stock Exchange, or YSX, is set to launch on December 9 after three years of preparations and $24 million of investments, according to a statement by Myanmar’s Deputy Finance Minister Maung Maung Thein who is also Chairman of the Securities and Exchange Supervisory Committee. The exchange, ironically being developed by state-owned, but US-blacklisted Myanmar Economic Bank together with two Japanese cooperation partners, seeks to bring more stability and clarity into the opaque investment landscape in Myanmar and attract domestic and foreign capital. The foreign partners, Tokyo Stock Exchange and Daiwa Securities Group, are holding a 49 per cent stake in YSX.

Only a handful of companies are candidates to become YSX-listed at the time of launch, among them First Private Bank, Asia Green Development Bank, Myanmar Citizens Bank, Cooperative Bank, Forest Joint Venture Company, Thilawa Holdings Plc, First Myanmar Investment and Myanmar Agribusiness Public Corporation. Overall, 57 companies applied for a listing, according to the Securities and Exchange Commission of Myanmar (SECM). Some companies have been reluctant to join the exchange at this point of time, though, waiting for further refining of listing rules and regulations.

The SECM’s selection for shortlisting the first companies was based on criteria such as a minimum of 500 million kyat ($385,500) in paid-up capital and a minimum of 100 existing shareholders. There are also special regulations for joint ventures between domestic and foreign firms which will be required to operate separate bank accounts for US dollars and the local currency and must maintain a minimum balance of 15 billion kyat ($11.5 million).

Both projects, the new business district and the new bourse, are expected to boost investor confidence in Myanmar again after foreign direct investment fell during the first seven months of the country’s financial year (April to March) to $3.7 billion from $3.9 billion over the same period last year, said the Myanmar Directorate of Investment and Company Administration in a statement, indicating that investors had adopted a wait-and-see attitude for several months in advance of the November 8 elections. However, after the landslide victory of Aung San Suu Kyi’s democracy movement, economic sanctions may well be lifted and the economy including foreign investment inflows could pick up significantly.